Robo-Advisor Buying Guide 2026
By Itai Varochik | Updated February 18, 2026 | 3 min read
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What is a Robo-advisor?
A robo-advisor is an automated investment platform that builds, manages, and rebalances a diversified portfolio based on your risk tolerance, goals, and time horizon. Most charge 0.25% annually vs 1% for human advisors.
1. management fees
Most charge 0.25% annually. Range: free (Schwab, SoFi) to 0.65% (Betterment Premium with human advisors). On a $100K portfolio, the difference between 0% and 0.25% is $250/year — small compared to potential tax savings.
2. tax optimization
Tax-loss harvesting is the most valuable feature for taxable accounts. It automatically sells losing positions to offset gains, potentially adding 0.5-2% in after-tax returns annually. Wealthfront leads with direct indexing at $100K+.
3. account minimums
Betterment and SoFi: $0. Wealthfront: $500. Schwab: $5,000. Vanguard: $3,000. Match the minimum to your starting capital.
4. human advisor access
If you want occasional human guidance: Betterment Premium ($100K+, 0.65%) and Vanguard Personal Advisor ($50K+, 0.30%) offer hybrid models.
Frequently Asked Questions
Are robo-advisors worth it?
Yes, especially for hands-off investors. The combination of low fees, automatic rebalancing, and tax-loss harvesting typically outperforms self-managed portfolios for most investors.
Betterment vs Wealthfront - which is better?
Betterment for: $0 minimum, human advisors, goal planning. Wealthfront for: direct indexing ($100K+), Path financial planning. Both charge 0.25%.